Flooding the Market with Useless Prospects: CAT Adjusters and Training

Its a well known fact the insurance claims business has, at times, struggled to acquire reasonably talented and professional individuals. This is a topic that’s been tossed around from one publication to the next for a long time. Aside from AICPCU certifications, no one really seems to offer much of a prospect on how to alleviate this issue.

That is to say, who goes through a secondary education in search of a degree in insurance claim handling? There are risk management degrees on the collegiate level but they don’t often discuss the nuances or fundamentals of the insurance policy. Besides, what college grad really wants to go write auto estimates for the first few years out of college?

I started in this business circa late 2002 working for a very small office that belonged to a small franchise. This particular office was staffed with just one man who had over 25 years of experience and his assistant. My experience (prior to) consisted of working for an old school commercial general contractor, who actually submitted his sub-contractors invoices/estimates and merely applied his OH&P. I had other jobs but they really didn’t apply, and like many others, I fell into the adjusting business by way of chance and directly into the fire. There was no interview. There were no certification, and there remains no Ohio licensing requirement for independent adjusters.

The leading question though is, what did I do for those first six months? I transcribed reports at a very low hourly rate. I glued (yes, by hand) 35mm film-developed photographs to 8.5 x 11 paper, even though it was slightly outdated at the time, and hand-wrote captions. I believe there are two phrases for opportunities in life, and they are called paying your dues and learning the ropes.

I’m fairly certain, at least from my own research, that a few things happened somewhere around the post-Katrina era. First, a handful of hardworking independent adjusters made a bunch of money. The adjusting companies who had the contracts for those claims made millions, and some of them made successful businesses that continue to provide claim services under catastrophe and structural loss circumstances. The remaining folks either went belly up or decided to start selling a rather poorly designed training service. This attracted every Tom, Dick, Harry (and Sally) who wanted to Get Rich from Adjusting Claims!. Storm chasing contractors and adjusters came out of the wood-work after spending their savings, assuming they could also make a lot of money. The percentage of catastrophe claims is way down and the story goes the market is now flooded with a bunch of folks who preach their ability to adjust claims by merely taking a software estimating class and passing Texas or southern license exams which really dont encompass the business of adjusting. Some are smart enough to suggest they would be willing to shadow for a claim or two, but most of those folks literally have palm trees on their resume heading, as if theyre already on retirement island! The rest seem to be convinced they are ready to go, and all of them want to be deployed on some sort of roster, yesterday. Who knows where these terms even surfaced.

Today we are sitting in a market saturated with folks who have been told they will make money immediately after receiving their adjusters license, and the truth is that a lot of them aren’t very well spoken. Of course, that’s something that comes in time, through years of experience. I could go on for days about these training centers and how they actually promise inexperienced folks they’ll be working by next week; never mind the liability of operating a business on those terms. I couldn’t think of a more crummy sales-pitch, but the world goes poorly sometimes, especially for those who buy into these over-priced crash courses. I don’t care to fix the dilemma, and neither do most of my colleagues, but I can tell you where those resumes with poorly written cover letters go. Right to the circular file. Correction. If I had the time (in my wildest dreams), there would be legislation preventing these kinds of training operations.

There are a lot of positive things to say about training from the ground up, but there aren’t very many folks who just spent an absurd amount of money on some bogus training to write estimates that want to work at the pay level of an inexperienced assistant. Meanwhile, these training companies are raking in tens of thousands per month in revenue. Id be hard pressed to find that any of them even cover claims outside of residential property adjusting, if they even work in that field any longer.

My advice to all you folks wanting to get into this business? Skip the training classes and quit handing your money over to a bunch of con-artists. This business needs people who know how to write and have some kind of decent grammar skills. Please, brilliant trainer, tell me what kind of education you gave this person on how to help keep my adjusting business profitable? You didn’t happen to cover all the nuances of a standard HO or CGL form, did you? I didn’t think so, and the last I checked, the adjuster license exam didn’t have much information on this either.

I dont want to sit around and re-write your report for you, Mr. or Mrs. Adjuster-To-Be, and there’s more than writing estimates in this business. You need to start out by transcribing reports and working with documents that will teach you some decent writing skills, and the basics of cause and origin. Not everything is a hail or wind claim, and if I’m going to make room for you, then you better be able to cover me from time to time. Quit fantasizing about making $100,000 a year because it isn’t likely to happen for a long time. Getting accepted onto any respectable and decent CAT team (that actually pays you) is a stroke of luck and one part genius, but making it through a storm takes a lot of endurance and quick-handed knowledge. Youve got to impress my clients, and believe me, they dont solely care about your estimate writing skills. They care about your personal appearance, ability to sit in a deposition or on a witness stand, and a hundred other things. Think long-term, and even if you’re older, stick with the business and get rich slow. Insurers want long term adjusting businesses, not someone living in an RV.

I probably have a few hundred other tips on the basics of the insurance claims business, but lets start with the basics and get back to providing value to our clients.